This tech platform is allowing brands to scale native advertising in a big way

Advertising on the internet is changing fast — and many would
argue it's for the better.

The new trend is native advertising, or advertiser-sponsored
articles (like this one!) that inform and engage with consumers.
It's considered an effective, less invasive way to
reach audiences than banners and pop-ups.

Native advertising is designed to fit in with the look and feel
of whatever site you're on. But that's the trouble: If
every ad gets customized for every site, how can advertisers make
their work scalable? How can they know they're getting the best
prices available? And what kinds of native ads are the most
effective in the first place?

To dive deeper into the next phase of native advertising, BI
Studios spoke with Lon Otremba, CEO of Bidtellect, the advertising industry’s first
open native ad exchange. Using Bidtellect, thousands of premium
advertisers and publishers can now buy and sell native ads in
real time. Otremba talked to us about how new technologies are
revolutionizing native advertising's reach, and he offered some
advice on what kind of native advertising works the best.

How did you get involved in digital advertising?

In the early '90s, I was
associate publisher of PC Magazine, which at the time was the
largest magazine of its kind in the technology sector. Two very
sharp entrepreneurs, Halsey Minor and Shelby Bonnie, approached
me with a business plan for a technology media company called
CNET, based solely on digital media, and asked me to consider
joining them. I was hooked from the start and joined as the
founding EVP of sales in 1994. I have been in digital media ever
since.

Bidtellect CEO Lon
Otremba.Bidtellect

How did native advertising come about?

After billions of dollars of invested capital and countless hours
of engineering, the industry hasn't been able to overcome the
fact that consumers just don’t engage with display ads. And
consumers are showing a strong willingness to engage with native
ads, particularly when compared with banner ads.

What's causing the native advertising field to boom
now?

People like native ads. And importantly, they're now scalable.
Our cofounder John Ferber also helped found Advertising.com,
the display advertising industry’s first exchange and
yield-optimization technology company.

After Advertising.com was sold to AOL, John began to see a native
advertising marketplace emerge. He recognized some distinct
parallels with the display market, and realized that he could do
for native advertising what Advertising.com did for display. So
he built a sophisticated technology platform that enables
advertisers and publishers to efficiently manage all aspects of
native advertising.

What kind of challenges did Bidtellect face in developing
its platform?

We had to build everything from the ground up, because none of
this technology existed. Nothing existed to specifically enable
provisioning, planning targeting, or running native ads across an
open network of publishers. There also wasn't an openRTB exchange
enabling access to native ad inventory. There wasn't any
technology that allowed ad elements to be input once, then
reassembled, in real time, on a publisher site — and look native
to each page it was on. We also had to build programmatic
connections from end to end to enable programmatic trading, and
we had to build a complete optimization layer specific to native
advertising.

One of the things we saw is that to get to the
kick-open-the-doors scale point, some things had to be tackled.
If you’re a big brand and you’re used to spending tens, if not
hundreds of millions, of dollars on ad campaigns over the course
of a year, having this cacophony of different platforms and
approaches is very, very painful. So, one of the things that was
an overriding driver of our technology and product development
was to try to take as much of that pain out of it and build a
sophisticated technology product that people could manage.

BI Studios

How does Bidtellect's native advertising platform work?

First, everyone gets a simple-to-use interface, specifically
designed for the native advertising market. From the
advertiser’s side or "demand side," advertisers can come in and
plan their native ad campaigns. They can upload elements and
graphics. They can say where they want those campaigns to run,
what their target demographics are, and what locations and device
types they want to advertise on. There are dozens and dozens of
different kinds of targeting criteria. The opposite side of that
coin is the supply side. The publishers can set criteria on their
side, too.

The third component brings both sides together in a real
time-bidding environment. That’s where an advertiser can be
exposed to inventory sources that would be difficult to
individually assemble. It can get more elaborate than that, of
course: There's a lot of ways that supply makes its way into
the exchange, and there’s a lot of ways the demand side can
access that supply.

How does an advertiser know that it's had a successful
campaign?

Every advertiser has a unique way of looking at what’s successful
for them. Typically — and not to oversimplify — they fall into
one of two buckets. One type of advertiser is looking for some
kind of direct response metric, that is, some way of measuring
clicks or conversions. That’s one bucket.

The other kind of advertiser says, “I’m going to equate people
engaging with my brand as value, and so the more they engage with
my content, the more they engage with my brand.” That kind of
brand-oriented response is increasing. We created an engagement
score based on some metrics that we plug in, and we’ll create an
algorithm.

Let’s say you’re an advertiser and your initial campaign
engagement score comes out as a 7.2. Our technology can
yield-optimize against it to start moving that score up. Our
algorithm now has five components in it. A year from now, that
may have 20 things in it. We actually have a patent application
pending on the way we’re doing it.

These are the words you should try to avoid in headlines:
"easy," "how to," "credit," "watch," and positive superlatives
like "best."

What kinds of words work best in headlines for native
advertising?

Our partner Outbrain says these five words are the best for
engagement (in descending order): "who," "hot," "surprise,"
negative superlatives like "never" and "worst," and "photo."

And these are the words you should try to avoid in headlines:
"easy," "how to," "credit," "watch," and positive superlatives
like "best."

What do you think the digital ad field will look like in
10 years?

As Yogi Berra once said, it’s tough making predictions,
especially about the future. I’ll take a stab at it, though. I
think consumers will continue to increasingly accept and engage
with quality content, even if it's the product of advertisers.
Moreover, the more consumers engage with native ads, the greater
the incentive for advertisers to deliver quality content.

Learn more about native advertising and scalability at
the Bidtellect website.